One quote from her piece:
Bailing out the auto industry offers no net gain to society. It is a straight transfer of resources from one sector to another: we tax money, or borrow it from a finite pool of capital available to the nation, and spend it on auto workers. The people who pay the taxes, or the people who would have borrowed that investment capital, now have less to spend. Whatever they would have bought goes unbought; whoever would have made it goes unemployed. To coin a phrase, what is made on the swings is lost on the roundabouts We have the illusion of a gain only because that other group of people is invisible. Even if we don't bail out GM, they will not be visible--we will never know who didn't lose a job or a business because we declined to spend one squillion dollars saving the Chevy Cobalt.
It's been as clear as day to everyone for years that the once-Big Three are lousy companies with lousy businesses, products that don't sell, and that nobody wants to invest in anymore - except politicians. We're a Toyota country now (except for the Ford F series).
But who ever said raw politics has to make logical sense? This is called vote-buying, and a big thank-you to Michigan for going blue by supporting existing union contracts. With our money. There is a certain sort of political logic in that.
Comment from The Barrister: What is often left out in these discussions is that bankruptcy would not put these companies out of business and these workers out of work. They would reorganize (and renegotiate contracts), or sell off their parts.
And from BD: Follow the money. Best I can figger, all that a bailout would bail out is the existing union contracts, and little more.
And from the NJ: I would not be happy to be working to support Michigan union benefits, which are so much more generous than mine - or those of most folks - that it's ridiculous. Why would I want to do that? Those businesses are obsolete, but somebody is going to try to sell us the notion that they need my money to go green, or some similar BS. Toyota already did that.
